June 18, 2024

Dairy Alternative Decadence: Indulge Without Dairy

The dairy alternative market is a growing segment in the food and beverage industry. Products like soy milk, almond milk and oat milk provide consumers with dairy-free and often more sustainable options. These non-dairy milks are used as substitutes in foods like yogurt, ice cream and cheese. They appeal to consumers seeking to reduce their consumption of animal products for health, ethical or environmental reasons. The global dairy alternative market is estimated to be valued at US$ 27.0 Bn in 2024 and is expected to exhibit a CAGR of 10.% over the forecast period 2023 to 2030.

Key Takeaways

Key players operating in the dairy alternative market are Danone North America Public Benefit Corporation (US), The Hain Celestial Group, Inc. (US), Blue Diamond Growers (US), SunOpta (Canada), Sanitarium (New Zealand). These companies offer a variety of plant-based milk products through supermarket retail channels and online platforms.

The global dairy alternative market provides many business opportunities for market players as demand for vegan, lactose-free and nutritious options continues to increase. Product innovation will be key as companies develop new plant-based yogurts, cheeses and other innovative products.

Advancements in food science and plant breeding have led to dairy alternatives that closely mimic the taste and texture of dairy milk. Technologies like precision fermentation now allow for animal-free dairy products without the traditional plant-based compromises in taste or cost. These innovations are driving further adoption of dairy alternative products.

Market drivers

Growing health awareness is driving many consumers to limit or eliminate dairy from their diets due to concerns over lactose intolerance, food allergies or cholesterol content. Plant-based milks provide dairy-free alternatives that are often perceived as more nutritious options.

Tightening environmental regulations around industrial farming and livestock emissions are also encouraging the switch to more sustainable plant-based dairy substitutes. Productions methods for plant milks have a lighter impact on land, water and greenhouse gas emissions compared to cow’s milk.

Challenges in the Dairy Alternative market:

The dairy alternative market is growing at a rapid pace as more people are switching to plant-based diets. However, there are still some challenges that are hindering the mass adoption of these products. One of the major challenges is the taste and texture of dairy alternatives as they are not able to replicate the taste and texture of dairy milk perfectly. Product developers are still struggling to achieve the same creaminess, thickness and flavor that dairy offers. This is a significant deterrent for those who want a direct replacement for milk and other dairy products.

Price is another challenge as dairy alternatives are generally more expensive than regular cow milk. While prices are falling steadily, they are still higher for most consumers. This acts as a barrier, especially in developing markets. Availability and awareness are also issues as dairy alternatives are not universally available at all grocery stores or neighborhoods. Many people are still unfamiliar with the various plant-based options available in the market. Their skepticism around the nutritional value of these products is also a challenge.

Current challenges:

One of the key current challenges being faced by the dairy alternative industry is education and awareness among consumers. While the market is growing steadily, many people are still unaware of the various types of plant-based milks and other dairy alternatives available. Educating people about the nutritional profiles, taste, and benefits of switching to these more sustainable options is important. Companies must spread awareness about the ease of incorporating non-dairy choices in regular diets. Another major challenge is the higher cost of production for many plant-based products as opposed to dairy. Product developers are continuously working on formulating cheaper and simpler recipes to make alternatives more affordable for the masses. Stiff competition from dairy lobby groups and lack of policy support are also hindering the industry’s growth in some regions.

SWOT Analysis

Strength: Dairy alternatives offer various health and environmental benefits. They are suitable for people with dairy intolerances or who follow vegan/vegetarian diets.
Weakness: They are still more expensive than regular dairy products. Also, many alternatives do not perfectly mimic the taste and texture of milk and other dairy products.
Opportunity: Growing global awareness about health, nutrition, and sustainability is driving more people to adopt plant-based lifestyles. Demand for dairy alternatives is rising steadily.
Threats: Dairy lobby groups are pushing back against the plant-based movement. Regulations or policies could favor the dairy industry in some regions. Competition in the alternative products sector is also intensifying.

In terms of value, the dairy alternative market in North America is currently the most concentrated geographical region, accounting for over 35% of the global market value. Europe is the second largest region. However, Asia Pacific is emerging as the fastest growing regional market for dairy alternatives. Factors like growing health consciousness, rising incomes, and expanding vegan populations are driving the tremendous growth in the APAC countries especially China, India, and Southeast Asia. The region’s market value share is expected to rise significantly in the coming years.

“*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it”